No Holiday Magic Expected for MetroPCS (PCS) Amid 'Grinch'-Like Takeover Bid
Tweet
Share
E-mail
Get Alerts PCS Hot Sheet
Join SI Premium – FREE
MetroPCS (NYSE: PCS) is flat today amid speculation that there might not be a bidding war for the wireless provider after all.
Shares of the company are down 13 percent or so since the day before speculation on a deal with Deutsche Telekom's T-Mobile USA unit started. Sprint (NYSE: S) is up over 6 percent since then. Looking at the start of 2012, Sprint is up 135 percent, versus just a 15 percent gain for PCS.
One Bernstein analyst said PCS should have been valued at $9.27 to $16 per share at the time, excluding expected synergies. Inclusive of about $800 million in synergies, that valuation goes up to $11.84 to $19.51 per share.
So, Sprint, which is being heavily invested in by Japan's Softbank and is acquiring the rest of Clearwire (Nasdaq: CLWR), is probably off the table for a higher offer. Who is left, then?
The WSJ suggests that DISH Networks (Nasdaq: DISH) might be a candidate. DISH made an $11 per share proposal for PCS over the summer, according to regulatory filings. DISH has also been approached by Sprint for a possible wireless partnership, though nothing further has developed on that front. DISH might also wait and partner with a T-Mobile/PCS combination.
Given that Deutsche Telekom plans to invest $4.7 billion in expansion of T-Mobile's network in 2013, that seems like a smart play for PCS to do.
Another candidate might be Mexico's Carlos Slim. He isn't likely to do anything that might upset large America Movil (NYSE: AMX) shareholder AT&T (NYSE: T), but he is looking to make up for larger loses incurred in Europe. (AT&T maintains a 9.5 percent stake in the Movil.)
In any case, PCS holders could hang on for the ride. T-Mobile will begin selling Apple's (Nasdaq: AAPL) iPhone in 2013 and the network update will pay dividends as more and more consumers look for alternatives to contract-heavy carriers.
Shares are flat today.
Shares of the company are down 13 percent or so since the day before speculation on a deal with Deutsche Telekom's T-Mobile USA unit started. Sprint (NYSE: S) is up over 6 percent since then. Looking at the start of 2012, Sprint is up 135 percent, versus just a 15 percent gain for PCS.
One Bernstein analyst said PCS should have been valued at $9.27 to $16 per share at the time, excluding expected synergies. Inclusive of about $800 million in synergies, that valuation goes up to $11.84 to $19.51 per share.
So, Sprint, which is being heavily invested in by Japan's Softbank and is acquiring the rest of Clearwire (Nasdaq: CLWR), is probably off the table for a higher offer. Who is left, then?
The WSJ suggests that DISH Networks (Nasdaq: DISH) might be a candidate. DISH made an $11 per share proposal for PCS over the summer, according to regulatory filings. DISH has also been approached by Sprint for a possible wireless partnership, though nothing further has developed on that front. DISH might also wait and partner with a T-Mobile/PCS combination.
Given that Deutsche Telekom plans to invest $4.7 billion in expansion of T-Mobile's network in 2013, that seems like a smart play for PCS to do.
Another candidate might be Mexico's Carlos Slim. He isn't likely to do anything that might upset large America Movil (NYSE: AMX) shareholder AT&T (NYSE: T), but he is looking to make up for larger loses incurred in Europe. (AT&T maintains a 9.5 percent stake in the Movil.)
In any case, PCS holders could hang on for the ride. T-Mobile will begin selling Apple's (Nasdaq: AAPL) iPhone in 2013 and the network update will pay dividends as more and more consumers look for alternatives to contract-heavy carriers.
Shares are flat today.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bernstein on whether Hershey (HSY) could eventually step up to buy Mondelez (MDLZ)
- Virtu Financial said to explore $3.5B sales of brokerage unit
- Sempra sells Mexican gas distributor Ecogas for ~$500M
Create E-mail Alert Related Categories
Insiders' Blog, Mergers and Acquisitions, RumorsRelated Entities
Dividend, Carlos SlimSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
